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Compilations and Reviews of Financial Statements

Where an audit may not be necessary, Kingston & Knight Accountants can assist you by performing a review of your financial statements and providing a limited form of assurance as to whether any material modifications should be made to those financial statements for them to be presented in accordance with Generally Accepted Accounting Principles (G.A.A.P.) or another comprehensive basis of accounting. Based on our knowledge and understanding of your business and industry, we perform inquiry and analytical procedures to obtain a reasonable basis to express such limited assurance.

A review differs significantly from an audit, in which the auditor provides reasonable assurance that the financial statements, taken as a whole, are free of material misstatement. A review does not contemplate obtaining an understanding of the entity’s internal control, assessing fraud risk, tests of accounting records, and other procedures ordinarily performed in an audit.

Where audit or review services may not be needed, Kingston & Knight Accountants can assist you by compiling your information in the form of financial statements. We then prepare financial statements without undertaking to offer any assurance on them. In addition, we are also available to assist you in the preparation of management-only financial statements designed exclusively for internal use.

Business Accounting

When a Business Accountant can help you grow your business…It may be time to delegate

As a small business owner, you likely enjoy the benefit of having control over your work. You are able to design your own business strategy, set your own working hours, determine your finances, and regulate your workload. Mastering these things is wonderfully liberating, but sometimes it can prevent you from delegating tasks efficiently to aid the growth of your business.

You can risk burning out if you hesitate too much when deciding whether or not to obtain help in running things. Understandably, you may feel as though no one else could possibly know your business like you do, and that nobody could handle your operations like you can.

Being unable to delegate can leave you feeling stressed, diminishing the freedom that should come with owning your own business. Learn to let go and trust others to assist you in handling some aspects of your business, so that you can better spend your time looking after the rest.

Your business’s financial affairs are a good place to start. Choose an accountant that best suits the requirements of your business, and ensure that you trust them to handle your financial information. Handing over control of finances to a qualified and experienced expert will leave you with much more time to focus on your strengths as a business owner.

Often, successful business owners are also expert delegators who know when to accept help, and who to get help from. Learn from them and apply this mentality to your own business.

Dealing with the government
Government bureaucracy and paperwork can be one of the most daunting obstacles when starting a business. Tax filing is just one government requirement which an accountant can manage for you.
An accountant can ensure that you meet your obligations and continue to operate smoothly by:
• Completing and filing required compliance and legal documents for your business.
• Ensuring that your business is kept up to date with tax laws as they develop or change.
• Preparing annual accounts statements.
• Ensuring that your business’s status is updated in the government’s company register.
• Maintaining records of administrative personnel (such as directors).
• Organising and recording stock/share allocation, including in crucial situations such as a business partner leaving or joining.
• Handling your payroll and making sure that your staff’s tax payments are properly recorded.

A blunder when preparing tax documents could cost you a lot of money. A good accountant is incredibly unlikely to make any mistakes, and can probably suggest quite a few ways in which your business can free up money or begin to expand.

If you’re audited
It is statistically unlikely that your business will face a government audit due to the high number of small businesses compared to the relatively small number of auditors. But should it happen, an audit can be stressful, time-consuming, and expensive.

If you haven’t used an accountant’s services before, this would definitely be the time to start. An accountant can advise you on how the auditing process works, and how best to manage it. They can ensure that you comply with any recommendations made by the auditor, and that your business continues to comply with tax laws after the audit is complete – because the government is likely monitoring your business more closely now.

Some accountants offer audit insurance, which protects you from the extra fees you would have to pay your accountant in the event of an audit. Responding to a review, official enquiry, audit, or investigation will involve a considerable amount of work for your accountant, and you won’t have to pay them for this extra work if they offer audit insurance.

Some accounting software includes an ‘audit trial’ feature, which makes it easier for both the government and you to see what transactions have taken place, when, and who they were authorised by.

Applying for overdraft or a business loan
Lending to small businesses has dropped in most countries since the Global Financial Crisis in 2009. This means that it may be more difficult to obtain a loan, and you will require a stronger business case in order to do so.

Hiring an expert Melbourne business accountant will improve your chances of securing credit by demonstrating your commitment to the business. A business accountant will also be able to present useful and relevant information which supports your credit application. They can also respond to any questions or requests for information the lender might make in regard to expenses or revenue projections.

A good accountant will not only assist you in managing the application process, they will also help you decide which loan suits you. An accountant’s knowledge of finance can be of immense benefit when comparing lender interests rates and terms and conditions.

Should I hire an accountant for my business?

If your business is growing, the answer is yes!

Businesses develop and grow at different rates, but often, this growth is not necessarily linear or steady. A big project or a new client might mean that your business needs to grow quicker than you had expected.
An accountant will be able to assist you the processes involved in growth transitions, such as securing more space for your operations or hiring employees. Accountants can manage financial details (property tax, payroll, employee tax, utility payments etc) on your behalf so that you are free to focus on the core operations of your business.
Cash flow, inventory management, pricing, and other financial variables can be analysed in detail by an accountant through the use of specialist software. They can then use this to give you, the business owner, insight into how best to grow and develop your business. An accountant can even assist you in determining the best time to introduce a new type of product or service.

Planning to take on a franchise?

Get an accountant’s advice

There are some sectors whether taking on a franchise is a relatively accessible, and therefore common, way to start a business. This eliminates some of the common risks associated with starting a business by ensuring that the product or service already has an established reputation and market value. On the downside, you have less commercial freedom this way – as well as increased overheads.

It can be difficult to determine whether or not a franchise is worth taking on, considering all the costs involved. An accountant can help with making this decision. They are able to review a franchise contract and form estimates on income and cash flow based on the information provided by the parent company.

At the end of the day, the decision comes down to you. But hiring an accountant can mean the difference between poor judgement and a well informed decision. If you’re planning on buying any business, you should get an accountant’s advice.

Someone seeking to own their own business may be able to buy one for themselves rather than starting one from scratch. This can remove some of the hard work, but you should always seek an accountant’s advice before committing to the purchase of an existing business. A business accountant can help you make the right decision by reviewing the business’s accounts in detail, and informing you if something looks problematic. For example, a business’s assets, including its equipment and other essential materials, may be leased and not fully owned. An accountant can check these details for you, as well as whether or not the business has any outstanding debt.

It may also be a good idea to consult a lawyer during this process. A lawyer will be able to work with your accountant to discover anything and everything you may need to know about the business you intend to purchase and operate. This will give you the peace of mind to make an informed decision and a sensible offer should you decide to buy.

An accountant’s advice is vital if you are planning to sell your business

As a business owner, it is unlikely that you wouldn’t have employed the services of an accountant at some point before deciding to sell. But if you have, you definitely should hire one before you sell.
A business accountant will be able to prepare your business’s financial records and produce vital documents such as a statement of accounts for you to show potential buyers. With the use of specialist software, an accountant can visualise complex financial information and create useful charts, graphs, and tables which can be used to demonstrate the strength and value of your business.

As part of the due diligence process when a business is being taken over, your accountant will be able to communicate with the buyer’s accountant to ensure that everything is in order.
All in all, an accountant’s services will ensure that you are able to get the most money you can when it’s time to sell the business. Depending on the structure of a sale, the amount of money left after tax can vary. For instance, monthly payments made over several years may be more tax-efficient than a lump sum. Every sale is different, and the services offered by an accountant will ensure that you get the best result when it’s time to sell your business.

Basically, an accountant can help you every step of the way.

At every stage of your business’s growth and development, and accountant can help to ensure things run as smoothly as possible from a financial standpoint. They are able to make your life easier by managing complicated financial matters so that you, as the business owner, can focus on other areas where your time can be better spent.

Audits of Financial Statements

Kingston & Knight Accountants approach to auditing your financial statements begins with obtaining a thorough understanding of your business and industry, including your internal controls, and ends with the expression of an opinion as to whether the financial statements are presented fairly in all material respects. As a part of this process, we identify and assess the risks which may cause your financial statements to be materially misstated and develop our audit strategy in response to those risks.

Prior to, and during the audit, our experts work closely with our clients to develop a service plan and calendar, which includes engagement planning meetings and frequent client communications intended to produce an efficient and cost-effective audit while minimizing disruption of your daily routine. As our planning progresses, we will provide lists of information to be supplied by you and a timetable for delivery of that information. Whenever possible, we will request that information and schedules be provided in electronic formats to permit us to use technology, including data extraction software, for greater ease of process. Our experience has shown that the use of electronic tools has greatly enhanced our ability to complete services efficiently and effectively, while providing useful information to our clients.

Contact Kingston & Knight Accountants today on 1800 283 481 to learn more about audits of financial statements and our Melbourne auditor services, or email us at admin@kingstonknight.com.au.

ASIC SMSF auditor registration

From 1 July 2013, ASIC’s new register for self-managed superannuation funds (SMSFs) came into effect as part of the federal government’s ‘Stronger Super’ reform program. The program was implemented to improve community confidence in the superannuation sector, as well as to maintain the sector’s integrity overall.

The Australian Securities and Investments Commission (ASIC) is responsible for the registration and approval of SMSF auditors, and sets relevant competency standards. As a result, ASIC has the power to suspend, cancel, and disqualify auditors where appropriate.

From 1 July 2013, any auditor wishing to sign off SMSF audit reports must be registered with ASIC. Applications for ASIC registration should have been made by 30 April 2013, but a more detailed timeframe can be found on ASIC’s website. There are a set of minimum requirements set by ASIC which apply to those wishing to register as SMSF auditors. These requirements relate to education, experience, and general competence as well as maintaining professional indemnity insurance.

Existing approved SMSF auditors may have applied for a new registration in compliance with transitional arrangements in place between 31 January 2013 and 30 June 2013, which would have exempted them from some of the registration requirements.

Overview of an SMSF Audit

Under section 35C of SISA, all superannuation funds are required to be audited on an annual basis regardless of their size of type. There are two components to these audits:

• Audit of the financial report – In order to enable the auditor to come to a conclusion based on the fair presentation of the financial report in compliance with appropriate accounting policies. This part of the audit must be conducted in compliance with the Australian Auditing Standards.
• Compliance audit – This enables the auditor to come to a conclusion relating to the compliance of the trustees with the requirements laid out in the SISA and the SISR. A compliance audit is conducted according to the requirements of the Australian Standards of Assurance Engagements.
When providing an audit report, the auditor is required to use the ATO approved form. This form covers both the compliance audit and the financial report audit. An auditor’s considerations must be made in accordance with the sections and regulations specified in the approved form of the audit report.
SMSF audit reports are not required to be lodged with SMSF Annual Returns. Regardless, details of compliance breaches or qualified audit reports must be provided.

What is an SMSF?

A working definition is provided in section 17A of the SISA. According to this section, an SMSF generally has the following traits:
• It has less than five members;
• Each trustee or director of the corporate trustee is a fund member, unless the fund is a single member fund. In the case of a single member fund, the sole member is either the director of a corporate trustee, or one of a pair of directors which are related; or one of a pair of trustees of whom the additional trustee can be anyone besides an employee of the member (unless the employee is related).
• Each of the fund’s members is either a trustee or a director of the corporate trustee;
• None of the fund’s members are employees of another member, unless they happen to be relatives.
• None of the trustees, or their directors (if a corporate trustee) receive remuneration for duties or services performed in relation to the fund.

If you require an ASIC SMSF auditor accountant contact Kingston & Knight today on (03) 9863 9779 or email us at admin@kingstonknight.com.au.

Agreed Upon Procedures

Where a client and/or a specified third party require financial information or an assertion of management to be independently verified, we can assist with the performance of an agreed upon procedures engagement. In such an engagement a report of findings is issued based upon the results of performing specific procedures, as agreed by the client and other specified users related to the subject matter.

Contact Kingston & Knight Accountants today on 1800 283 481 to learn more about our Melbourne accounting services, or email us at admin@kingstonknight.com.au.

Accounting and Business Advisory Melbourne

Rest at ease in knowing that your accounts are up to date, the bills are paid and you are aware of what your liabilities are.

If you are like most of our clients, you would much rather to concentrate on running your business than worrying about things like bank reconciliation’s, payroll and superannuation. By using our Accountting Support service, you can free up your time to run your business and save money in the long run. You can be assured that accounts are being prepared by a professional Bookkeeper who is under the supervision of a Certified Practicing Accountant at all times.

What is Litigation Support Melbourne?

Litigation support refers to the assistance provided by a forensic accountant in relation to any given case, which deals predominantly with the calculation of economic damages. Although litigation support represents support provided to a client with regards to a legal dispute, the role is not limited to existing litigation. A forensic accountant may advise a client in advance of a potential legal dispute, resolving their issue before it reaches the courtroom. Litigation support, as well as investigative accounting, is one of the primary roles of the forensic accountant.

Before Court Support

In advance of a financial dispute going to court, clients may retain a forensic accountant to assist in the determination and documentation of any potential financial loss or damage. Litigation support in the face of pending arbitration often resolves any financial disputes before they reach the courtroom.

Forensic accountants are distinct from typical accountants in their familiarity with legal processes and arbitration. More than this, they are experts in finance and in litigation, and know their way around a courtroom. This special legal knowledge affords them insight into the manner in which financial legal disputes are settled and resolved. With these skills, a forensic accountant may save their client time and money by circumventing courtroom arbitration. As such, forensic accountants are becoming essential for public or private entities that seek to swiftly and efficiently resolve financial disputes. If a dispute is set for legal channels, however, a forensic accountant may also provide litigation support to a client by retrieving, compiling, and processing any financial data relevant to their case.

In Court Support

On occasion, it is necessary that a financial dispute be resolved via legal channels. In such an instance, attorneys may retain forensic accountants in order to build their case upon the foundations of stable financial advice.

In court, the forensic accountant might lend their expertise to the witness stand. As experts in finance and finance-litigation, they are able to provide reliable testimonies with regards to all matter of economic disputes. Or they may even work on the other side of the witness stand – lending their guidance to legal counsel in the formulation of key questions relating to financial evidence. Their honed and practiced investigative approach affords forensic accountants an insight into problems or gaps that may otherwise have gone unnoticed. It is often this high attention to detail, cultivated by the forensic accountant’s broad knowledge base, that makes the difference between successful and unsuccessful resolution of financial disputes.

In addition to testimonial support, litigation support may also come in the form of a more technically simple – but equally as essential – guiding financial hand. Whilst attorneys often demonstrate an impressive capacity to retain and express financial information with regards to relevant legislation or legal precedent, their focus is narrowed by their legal lens. Forensic accountants work closely with legal counsel to provide assistance during research, or in the compilation of relevant financial data, to ensure that casework is both accurate and compelling when it reaches the court.

After Court Support

After a case has been tried, forensic accountants may assist in determining and calculating economic damages. This may involve compiling relevant data points and translating these into comprehensive and applicable reports. Their expertise allows settlement discussions to run smoothly and in a manner that is financially just.

Investigative Accountant Melbourne

What is Investigative Accounting?

Investigative accounting deals primarily with criminal matters and is the process of determining and identifying the existence, or degree, of any illegal financial activity. Sometimes – though less commonly – investigative accounting does peruse civil matters; such as in a divorce case in which one spouse withholds hidden assets from the other and a forensic accountant is retained to investigate the matter.

Often, a forensic accountant will be tasked by a corporate entity to investigate suspected illegal engagements by an individual, or individuals, within the company. On other occasions, they may be retained by a government department to conduct an investigation into suspected criminal activity. In the latter instance, special permission may be given to engage in government sponsored hacking for the purpose of a thorough investigation. Otherwise, forensic accountants are well-versed in various software to legally acquire relevant financial data points when conducting an investigation.

The Investigation

With a broad range of skills to support their approach, the forensic accountant plays perhaps the most essential role in the discovery and charge of financial falsification and misconduct. And never has there been a time when this role has been as significant as it is today.

With recent advances in modern technology – the onset of the internet, increasingly advanced coding, and newer and more powerful computers –, has come greater access to more ways of committing financial offences. As such, it is with great ease that individuals and groups are doing such things as falsifying financial statements, and committing identity theft or insurance fraud. Fortunately, forensic accountants are proficient with an equally as vast skillset to identify and investigate these matters.

One of the primary means of such an investigation is electronic discovery, or “e-discovery”. Electronic discovery is a sweeping term that encompasses all investigations concerned with the examination and detection of electronic data. Using their computer, software, a network, or a combination of these, forensic accountants are able to discover digital data to assist in their investigation.

Consider for instance, that a forensic accountant is retained for the investigation of major insurance fraud. Using various networks or software, a forensic accountant will investigate relevant electronic data and files to confirm or deny the legitimacy of the respective insurance claim or claims. The forensic accountant will then compile the data, create a report for their client, and finally advise on the next course of legal action. This approach epitomises the usefulness of forensic accounting with its combination of legal and financial support.

Investigative accounting also refers to non-electronic data. In this way, the investigation does not always entail the discovery of financial data, but the interpretation of already known data. In other words, a forensic accountant may be provided with a collection of relevant files and information, and tasked to investigate them using their unique financial knowledge.

Matters of Investigation

Forensic accountants are retained for the investigation of vast and various financial offences. Because forensic accountants have specialised skills in distinct fields, investigations are supported by an individual familiarity with each financial ecosystem.

Here are some examples of the financial offences regularly investigated by forensic accountants:

Forensic Accountants Melbourne – How Kingston & Knight can assist

Kingston & Knight are well-versed in a number of different financial and legal skills. It is our ability to see connections between legal and financial systems that sets us apart from your typical accountants. In fact, our forensic accountants normally require at least three years experience in accounting before they can be accepted into the field. Thus, a high level of financial and legal proficiency is inherent to the position – a sort of guarantee to our clients that we are a reliable expert in the field.

Kingston & Knights forensic accountants can be of assistance to a varying and broad spectrum of clientele. Our skills in investigation, litigation, and financial interpretation is often sought by attorneys for litigation support, companies or individuals for looking into dubious financial transactions, or even government organizations for the detection of financial criminal activity.

Investigate, Report, Support

Whilst the approach to forensic accounting varies on a case-by-case basis, it is often helpful to consider the forensic accountants approach as composed of three primary steps: investigate, report, support.

Clients that retain forensic accountants retain them for an entire process. The process, in its simplest form, involves investigating financial information relevant to the client’s case, interpreting this information into an easily understandable report for their client, and then supporting their client in their dispute by advising on legal approaches relevant to the financial issue.

It is important to note, however, that whilst this is a typical approach to forensic accounting (and a helpful way of thinking about the field), the role is not strictly confined to this linearity – rather it adjusts according to the individual needs of each client. For example, forensic accountants may be retained for the purposes of providing testimony to the court as an expert witness, in this case their skills of reporting significant information that they have interpreted takes precedence.

A Comprehensive Approach
When considering whether to retain the services of a Kingston & Knight forensic accountant, the greatest compelling factor to bear in mind is our ability to provide clients with “the big picture”. Kingston & Knight are known across Melbourne to be the experts in both finance and its application to litigation. Much has been said about the fact that whilst a lawyer may advise on law, and an accountant on finance, often neither have the proficiency that the forensic accountant does to translate one into another. This is not only significant for the overall approach to financial dispute resolution or financial investigation, but also for client experience.

A Scenario – Consider, for instance, that an individual is seeking to bring their ex-spouse to civil court based on the suspicion of hidden assets in their divorce. Now consider that this individual retains a typical accountant and an attorney. The attorney, accountant, and individual discuss their approach to the pending dispute. The attorney suggests a legal route and explains the significance to the accountant, the accountant contributes with their own advice for a financial route and explains this to the attorney, and the individual contributes their own desired outcome. The meeting that follows is one in which each contributor explains and elaborates upon their viewpoint, attempting to tie it into the others’ by opening and closing multiple ports of communication.

By retaining a Kingston & Knight forensic accountant instead, we are able to have the desired outcome interpreted into clear and cohesive advice that combines relevant notions of litigation and finance. The process is much more resourceful and time-efficient by cutting straight to the essential matters and excluding the unnecessary clutter of clarifications.

About Kingston Knight

Kingston & Knight Accountants is a Melbourne-based accounting/tax advisory firm with over 40 years collective experience working with individual clients, small, and medium sized businesses. We are passionate about bringing the best outcomes for out clients.